Since there are various types of generic organizational strategies,
firm performance measures and reward practices, the article begins with a
review of the relevant literature on these subjects. In addition, the
potential relationship between generic strategies and organizational
performance is also reviewed, post which the conclusions reached by the
authors is described: (1) Porter's generic strategies of cost leadership,
product differentiation, and focus remain the most commonly supported; (2)
While some studies conclude that only pure' strategies of cost
minimization or differentiation result in superior performance, other
research findings indicate that combination strategies (i.e. low cost and
differentiation) are optimal; (3) There is a substantial body of research
that typically suggests that human resource practices and the reward system
should be aligned to motivate employee performance that is consistent with
organizational strategy. However, the existing research is largely
theoretical and therefore, empirical exploration of these assertions is
necessary; (4) An industry comparison approach must be used when making
assessments of firm performance and include organizations from a wide
variety of industries. Such an approach will help determine how a firm
compares with its industry competitors as well as minimize the effect of
environmental factors such as an economic downturn.
Based on the above conclusions, the research study was designed on
the a priori hypotheses that specific reward practices that logically
supported each of Porter's generic strategies would lead to higher levels
of employee motivation and organizational performance. For example, it was
hypothesized that a firm that followed Porter's product differentiation
strategy and used specific reward practices that encouraged individuals to
innovate, develop new products or enhance existing ones will...